Neighbours, the Australian soap that has been broadcast on the BBC for 21 years, will not be show on the channel after the expiration of its current contract.

The BBC confirmed today that the hit show, which is watched worldwide, would not be shown on the BBC in the future because the corporation had pulled out of the bidding war.

In a statement the BBC said it has failed to reach an agreement with Freemantle, which owns the distribution rights to the show, due to the asking price of about £300 million.

"We have this afternoon formally withdrawn from the bidding for Neighbours," the BBC said.

"The BBC has had a long and fruitful relationship with Neighbours, which has transmitted on BBC1 for 21 years, and this has come to an end because of an unrealistic price demand.

"We do not believe that we could have justified to BBC viewers a price tag of what would have amounted to some £300 million across the term of the contract. Paying that sum would also have compromised our ability to invest in new original programmes."

It is uncertain who will now buy the distribution rights to the show, which has launched the careers of the likes of Kylie Minogue and Jason Donovan.

The show is broadcast at both 13:40 BST and 17:35 BST on BBC1 and is regularly watched by about five million people.